Brokers Win. Traders Lose.
Your broker doesn’t make money when you make money. It makes money when you trade. The more often you open the app, check the flashing prices, chase the stocks on the “most popular” list and place another trade, the more money it makes. Is it any wonder that some modern trading apps resemble a video game? They want to make sure you keep coming back – and trading.
Confetti & Badges
If you trade using a traditional broker app, you know it is neither glamorous nor fun. It is business. But on many modern apps, it seems your broker has become a slot machine, using points, badges, confetti, leaderboards, prize draws, push notifications and other game-like features to influence what you do.
Harmless fun?
Recent studies have found that they can make investors trade more often and take greater risks. One study found that when trading apps become more game-like trading volume jumped, and not by a little. And since that’s how the brokers make money, they enticed traders to trade more. And it worked.
So, what’s the problem?
There’s a catch. One study examined 142 gamified updates introduced by 17 major US brokers. Their estimated cumulative effect was a 21% increase in retail trading volume and a nearly 28% reduction in traders’ intraday returns.
More trades, more dopamine . . but less money. For the traders, of course.
The Business Model
The broker wants volume – it does not care whether you win or lose, as long as you keep coming back and placing more trades. A study found that after game-like features were introduced, retail traders traded more intensively, earned lower returns and experienced greater volatility.
The brokers gained more activity
The traders gained worse results.
Who wins?
So, who wins? The brokers benefit from more trades, while market makers benefit from the steady stream of noisier retail orders. A US study found that gamification made retail order flow less “toxic” to market makers, reducing their risks and trading costs. Retail traders earned lower and more volatile returns; the firms facilitating their trades did rather better.
All subsidized by the guy refreshing his app for the next confetti burst.
The house doesn’t need to cheat
It just needs you distracted, dopamine-drunk, and trading on impulse instead of a plan. Which is exactly why the antidote isn’t a better app. It’s getting off the wave entirely, and learning to read the tide.
The ITM Plan
It’s not another app trying to keep you clicking – it’s a backtested, independently verifiable system for identifying the major trend beneath the day-to-day noise that gamified apps encourage you to trade.
No confetti, no badges, no reason to check your phone forty times a day.
Just rules, tested and open for anyone to replicate, that tell you when to move and when to sit still.
Because the whole game these platforms are playing depends on you reacting to every wave. The ITM Plan is what it looks like when you trade the tide.
To the markets . . .
A bit of a nothing week. All three indexes are trading in increasingly tight ranges, suggesting that when the eventual break comes, the move could be forceful. The question, of course, is which way.
Let’s check the charts.
SPY Charts
SPY still in consolidation – going sideways. On Thursday it closed marginally below support – but on Friday it bounced back over it. The support is looking a little shaky, this week should give us a clue on which way this is headed.
We’re still some way off a death cross – unless something drastic happens, of course.
Nothing remarkable in the longer-term chart. The longer-term uptrend is still holding.
SPYG Charts
SPYG is still going sideways – and has been for over four months now. The trading channel has narrowed, bobbing between 119 – 124 (approx.). Convention has it that when the trading channel narrows it means that whenever the breakout comes it will be more powerful. But – of course – we don’t know which way it is going to break out, or when it is going to happen.
A death cross doesn’t look likely this week – but a big external shock could see it come very close. Longer term it is still in the trading channel.
QQQ Charts
QQQ has also been going sideways since May – which rather belies the ‘AI bubble’ we keep hearing about. Notice how the candles are becoming smaller (as in their bodies and shadows are both smaller) and the trading range is tightening.
We are very close to a death cross – but remember it is normal behaviour for the SMAs to touch and bounce off again, and not actually cross. However, I have just looked at the futures – and they are nasty. Monday’s trading could be pivotal.
Longer-term, QQQ has dropped back into its trading channel.
VIX Chart (Volatility)
The VIX closed Friday at 15.84, firmly below 20 and still within relatively low-volatility territory. However, the futures are signaling a much less comfortable opening on Monday. If that weakness carries into regular trading, we can expect the VIX to rise as traders begin pricing in greater near-term volatility.
ITMeter
The week ahead . . .
The Federal Reserve will dominate the week, with its two-day meeting beginning on Tuesday and the interest-rate decision, updated economic projections and press conference on Wednesday. The earnings calendar is unusually quiet, with no major company results likely to move the broader market.
Monday 14 September
Announcements: No major economic announcements.
Tuesday 15 September
Announcements: Empire State Manufacturing Survey; Federal Reserve meeting begins.
Wednesday 16 September
Announcements: Retail sales, import and export prices, business inventories, NAHB Housing Market Index; Federal Reserve interest-rate decision, economic projections and press conference.
Thursday 17 September
Announcements: Weekly jobless claims, housing starts, building permits, Philadelphia Fed Manufacturing Survey, pending home sales.
Friday 18 September
Announcements: Industrial production, capacity utilisation, Leading Economic Index, state employment and unemployment; quarterly options and futures expiration.
Wednesday’s Federal Reserve decision is the week’s main event. Markets will be watching not only the rate decision, but also the updated projections and comments about what comes next. Friday’s quarterly expiration could then produce heavier trading and sharper price movements as large options and futures positions are closed or rolled.
The Futures . . .
Are looking particularly nasty – especially tech – apparently in response to calls from several leading AI figures to slow development. Whether any meaningful slowdown is possible while the rest of the world continues advancing is another question.
Next week . . .
Every four years, Wall Street discovers the same “reliable” pattern: stocks struggle before the midterms, then surge when the uncertainty is over. It sounds convincing. It is repeated everywhere. But is it really a thing? Next week, we’ll test the claim against the data and see what history actually shows.
Things are happening at my end – the ITM Replication Pack is complete and frozen, ready to be downloaded. But I am holding it for another week or so, as I am going to publish the Bull & Bear book updated to 30 June 2026 – and I building an ITM Bot.
It has bothered me for some time that the search is essentially useless, and even tagging all the posts hasn’t produced better results.
So I am going to train a bot purely on my books, blogs and Q&A, allowing readers to ask it questions directly. I’m pretty excited about that – love new technology!
If anyone can think of a better name than ITMBot please let me know!
And sorry for the late blog – I went down south for the weekend, and got back late. It is spring here – and foaling time! Aaawww!
Hoping for a good week!
Heather
Trade the tide, not the waves
